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Granada swings to loss
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June 13, 2001: 3:10 a.m. ET
UK broadcaster sees weakness in advertising, first-half profit falls
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LONDON (CNN) - Granada, Britain's biggest commercial television broadcaster, said on Wednesday it made a first-half loss as advertising revenue fell.
The company, which makes hit soap opera Coronation Street and Blind Date, made a loss of £17 million ($23 million), or 0.7 pence share, in the six months to March 31.
That compared with a net profit, which was adjusted to take account of acquisitions, of £78 million, or 3.6 pence a share, in the year-earlier period. Sales slipped slightly to £779 million from £784 million.
"In our broadcasting business our net advertising revenue fell by 5.4 percent on a like-for-like basis in the first half," Chief Executive Steve Morrison said.
"The global advertising outlook remains uncertain and we continue to manage our costs accordingly," the company said. "Cumulative net advertising revenue for the nine months to June will be approximately £702 million, 10.6 percent down on last year."
Granada and its main rival Carlton Communications have seen a fall in advertising revenue over the last six month as businesses cut back ad spending as a U.S.-economic slowdown trickles across the Atlantic.
British Telecom (BT-A) has cut back on ad spending by 32 percent and the world's biggest burger company MacDonald's has reduced its ad spending by 11 percent.
Granada has also come under pressure from a plethora of new channels and pay-television networks.
Its own pay-TV service ONdigital, which it owns with Carlton, will not break even until it acquires 1.7 million subscribers. The service currently has 1 million customers and has drained about £700 million.
The company said it would cut costs and reorganize the company into two units, platforms and content.
Granada, which agreed to buy the regional television broadcast businesses of United News & Media for £1.75 billion in July, said it expects to save £30 million in 2001/2002 from the integration of the units.
Another £30 will be saved from the integration and slim-lining of the Independent Television network.
Granada (GAA), which broadcasts to more than 60 percent of UK homes, has seen its shares plunge 24 percent this year to close at 167 pence on Thursday.
Its shares have fallen more than 40 percent after hitting a peak of 282.5 pence in March 2000 at the height of the dotcom, tech and telecom boom.
Rival Carlton (CCM), the second-biggest commercial broadcaster in the UK, said last month first-half earnings before interest, tax, depreciation and amortization fell 21 percent to £139.3 million, as advertising revenue declined. 
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